The Causal Link between Sustainable Disclosure and Information Asymmetry: The Moderating Role of the Stakeholder Protection Context

Abstract

ABSTRACTThe main focus in this study is on analyzing the effect that voluntary information disclosure concerning corporate social responsibility (CSR) has on information asymmetry and its evidence in the stakeholder protection context. The use of the generalized method of moments (GMM) estimator for an international sample of 575 for the period 2003 to 2009, highlights how voluntary disclosure regarding CSR aspects reduces the problems of asymmetric information between the different market agents, which is especially important in environments characterized by a strong focus and commitment to stakeholders. Moreover, voluntary disclosure of information could arise from the existence of private information and agency conflicts. Therefore and in addition, this evidence is complemented by showing the bidirectional relationship between voluntary disclosure and asymmetric information in such environments. Thus, greater asymmetric information leads to higher voluntary information disclosure practices, which are able to reduce the agency problem in environments characterized by strong socially responsible commitment. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment